Donegal Creameries hit by seed-potato prices
SHARES in Donegal Creameries surged yesterday, after the company maintained full-year guidance, despite a weak first half of the year. Later, they fell back.
In the six months to June 30, pre-tax profits plunged 86pc to only €150,000, even as turnover rose more than 12pc to €35.1m. The interim dividend was flat at 7c.
The group blamed the tumbling profit on a poor performance at its produce division, where business was hit particularly hard by falling seed-potato prices.
Donegal Creameries runs several divisions, including dairy and produce, and has substantial property interests.
Last year, however, it sold its milk and retail stores to Connacht Gold and concentrated on its produce and more speciality dairy products. It doubled down on the seed potato business when it acquired 100pc of the Scottish grower and marketer of seed potatoes, AJ Allan Seed Potato Group.
Despite the problems in the first six months of the year, the company retained its guidance for the full year. Company chairman Geoffrey Vance said Donegal's forecasts of 5pc profit growth overall remained unchanged. The second half of the year is traditionally the more important one for Donegal, with more than 75pc of its profits generated during that period.
Despite the lower profits, shares in the company jumped more than 6pc at one point, albeit on light trading, before falling back. By the close, the stock was flat in Dublin at €3.30.